California Gov. Gavin Newsom (D) this week signed legislation eliminating a 25% tax hike on the state’s cannabis industry, which took effect this summer.
The proposal, AB 564, journeyed to the governor’s desk with near-unanimous bipartisan approval, with just a single lawmaker voting against the proposal. The bill’s sponsor, Assemblymember Matt Haney (D) of San Francisco, said the legislation “helps level the playing field” for California cannabis licensees, who are forced to compete with the unlicensed market while grappling with strict regulations and some of the nation’s highest cannabis tax rates.
“We’re rolling back this cannabis tax hike so the legal market can continue to grow, consumers can access safe products, and our local communities see the benefits.” — Newsom, in a statement
July’s cannabis tax increase was a pre-approved adjustment that came from a previous law that removed an industry tax on cultivation. That law, however, included an automatic 25% tax hike on the industry if cannabis revenues were to start falling, which they have.
“California’s cannabis economy can bring enormous benefits to our state, but only if our legal industry is given a fair chance to compete against the untaxed and unregulated illegal market,” Haney said.
